Nearly two-thirds of respondents expressed concern about running out of money during their retirement years, reflecting a growing anxiety about the rising cost of living. The online survey, which included 4,000 Canadians living outside Quebec, revealed that 61 per cent of participants fear depleting their savings. This apprehension is particularly pronounced among younger Canadians, with 67 per cent of those aged 28 to 44 reporting worries about their financial future.
Additionally, the survey found that women are more likely than men to express these concerns, with 66 per cent of women fearing their retirement savings may not last compared to 56 per cent of men. These fears have led to an increase in the amount Canadians believe they need to save for a comfortable retirement. On average, respondents now expect to require $55,000 annually, an increase from $50,000 in 2023.
Furthermore, the total amount anticipated for retirement savings has surged to $900,000, up by $200,000 from the previous year. The survey indicates that this heightened expectation is largely driven by individuals experiencing financial stress in their daily lives, particularly those without a structured financial plan.
Financial stress is prevalent, with 59 per cent of Canadians reporting they feel anxious about their finances on a daily basis. A notable 60 per cent of respondents indicated that they find it more challenging to manage their expenses compared to the previous year. These findings align with ongoing trends indicating that Canadians’ expectations for retirement savings continue to escalate.
For instance, BMO’s annual retirement survey revealed that Canadians estimate needing around $1.7 million for retirement, with millennials expecting to save even more, averaging $2.1 million. Experts suggest that rising anxiety around finances is tied to factors such as cost-of-living inflation and insufficient retirement planning.
Furthermore, the survey highlighted that approximately 73 per cent of Canadians either plan to or currently rely on the CPP as a source of retirement income. This reliance underscores the importance of informed planning and understanding of retirement benefits to alleviate financial worries.
In summary, as Canadians grapple with increasing expectations for retirement savings amidst rising costs and financial anxiety, the need for comprehensive planning and awareness of available resources becomes crucial. However, a soaring cost of living is making it harder for people to plan ahead for future financial security. Such concerns will also mean more elderly people remaining in the job market, making the market more competitive for younger generations.
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